Scope of Economics:

The scope of economics is the area or boundary of
the study of
economics.
In scope of economics we answer and analyze the following three main questions:

(i) What is the subject matter of economics?

(ii) What is the nature of economics?

(iii) What are the limitations of economic?

(i) Subject Matter of Economics:

There is a
difference of opinion among economists regarding the subject-matter of
economics. Adam Smith, the father of modern economic theory, defined
economics
as a subject, which is mainly concerned with the study of nature and causes of
generation of wealth of nation.

Marshall introduced the concept of
welfare in the study of economics. According to Marshall; economics is a study
of mankind in the ordinary business of life. It examines that part of individual
and social actions which is closely connected with the material requisites of
well being. In this definition, Marshall has shifted the emphasis from wealth
to man. He gives primary importance to man and secondary importance to wealth.

TheRobbinsian’s concept of the subject-matter of
economics is that:“economics is a science which studies human behavior as a
relationship between ends and scarce means which have alternative uses”.
According to Robbins (a) human wants are unlimited (b) means at his disposal to
satisfy these wants are not only limited, (c) but have alternative uses. Man is
always busy in adjusting his limited resources for the satisfaction of unlimited
ends. The problems that centre round such activities constitute the
subject-matters of economics.

Paul and Samuelson, however, includes
the dynamic aspects of economics in the subject matter. According to them, "economics is
the study of how man and society choose with or without money, to employ
productive uses to produce various commodities over time and distribute them for
consumption now and in future among various people and groups of society”.

(ii) Nature of Economics:

The economists are
also divided regarding the nature of economics. The following questions are
generally covered in the nature of economics.

(a) Is economics a science or an art?

(b) Is it a positive science or a normative
science?

(iii)
Economics As a Science or An Art:

Economics is both a science and an art.
Economics is considered as a science because it is a systematic knowledge
derived from observation, study and experimentation. However, the degree of
perfection of economics laws is less compared with the laws of pure sciences.

An art is the practical application of knowledge for
achieving definite ends. A science teaches us to know a phenomenon and an art
teaches us to do a thing. For example, there is inflation in Pakistan. This
information is derived from positive science. The government takes certain
fiscal and monetary measures to bring down the general level of prices in the
country. The study of these fiscal and monetary measures to bring down inflation
makes the subject of economics as an art.

After arriving at a conclusion that economics is
both a science as well as an art. Here arises another controversy. Is economics
a positive science or a normative science?

(iv)
Economics is Positive or Normative Science:

There again difference of opinions
among economists whether economics is a positive or normative science. Lionel
Robbins, Senior and Friedman have described economics as a positive science.
They opined that economics is based on logic. It is a value theory only. It is,
therefore, neutral between ends.

Marshall, Pigou, Hawtrey, Keynes and many other
economists regard economics as a normative science. According to them, the real
function of the science is to increase the well-being of man. They have given
suggestions in their works for promotion of human welfare.

For example, Malthus
has given suggestions of checking the rising population. M. Keynes has suggested
measures to remove unemployment.

We agree with Mr. Frazer, that an economist who is
only an economist is a poor pretty fish. An economist must come forward to give
advice to the problems facing the human being like depression, unemployment,
high prices, etc.,for increasing his welfare.

Economics, to conclude,
has both theoretical as well as practical side. In other words, it is both a
positive and a normative science.